Fiserv has gotten torched over the last six months - since May 2025, its stock price has dropped 62.3% to $63.69 per share. This was partly driven by its softer quarterly results and may have investors wondering how to approach the situation.
Is there a buying opportunity in Fiserv, or does it present a risk to your portfolio? See what our analysts have to say in our full research report, it’s free for active Edge members.
Why Is Fiserv Not Exciting?
Even with the cheaper entry price, we're cautious about Fiserv. Here are two reasons why FI doesn't excite us and a stock we'd rather own.
1. Long-Term Revenue Growth Disappoints
Reviewing a company’s long-term sales performance reveals insights into its quality. Any business can put up a good quarter or two, but the best consistently grow over the long haul.
Regrettably, Fiserv’s revenue grew at a mediocre 7% compounded annual growth rate over the last five years. This fell short of our benchmark for the financials sector.
2. Previous Growth Initiatives Haven’t Impressed
Return on equity (ROE) reveals the profit generated per dollar of shareholder equity, which represents a key source of bank funding. Banks maintaining elevated ROE levels tend to accelerate wealth creation for shareholders via earnings retention, buybacks, and distributions.
Over the last five years, Fiserv has averaged an ROE of 8.9%, uninspiring for a company operating in a sector where the average shakes out around 10%.
Final Judgment
Fiserv isn’t a terrible business, but it isn’t one of our picks. Following the recent decline, the stock trades at 8× forward P/E (or $63.69 per share). This valuation multiple is fair, but we don’t have much faith in the company. We're pretty confident there are more exciting stocks to buy at the moment. We’d suggest looking at our favorite semiconductor picks and shovels play.
Stocks We Like More Than Fiserv
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